For any business starting the process of evaluating ERP for their companies, one of the biggest challenges is understanding the unique industry terminology that ERP professionals use to explain their products, their industry and their offerings.

Like most industries, the ERP world comes with a lexicon of terminology that we take for granted, and often forget are not commonly used in the day to day running of small to mid-sized enterprise.

In this article we simplify and explain ten terms in the jargon you will come across when evaluating new systems. If you want to demystify the seemingly never-ending supply of acronyms we invite you to download our list with more than 40 useful terms that will help you understand better the common abbreviations and words used by the industry.

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Abreviations

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True Cloud

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Software Models

A model of software licensing which streamlines the total cost of ownership into lower monthly, quarterly or annual payments. The software is owned by the vendor and is accessed by the business through user licences. Access to the software includes hosting, support, maintenance and upgrades.

A model of software licensing that requires a total upfront investment. The business owns in perpetuity that version of the software. Ongoing maintenance and support are not included in the initial fee and must be arranged on the side. New versions and upgrades are not included.


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Searching for “ERP” on the web can be overwhelming, the amount of information that comes up is limitless and confusing. Different websites mention ERP and technical terms that can vary from one implementation to the next. To get a deeper understanding of how ERP solutions can transform your business, it better to have clear what an ERP actually is and the parts that compose it. Here are the first ten terms of our downloadable guide:

ERP

Enterprise Resource Planning software provides a comprehensive suite of functionality to suit the broad requirements of businesses in their areas of specialisation. ERP delivers functionality to look after customers and their orders, vendor details and purchasing and procurement, accounting and financials, warehousing and inventory management, work orders and assemblies, WIP and routing, project management, job costing and more.

Allocation Schedule

An automated way to allocate costs or income based on predefined rules in the system. E.g. Allocating rent expense to each department by headcount. Particularly useful for more granular profit and loss reporting.

CMS

A Content Management System is the software used to build, maintain and display your website.

Business Intelligence (BI)

Usually refers to dashboards and reports that draw data from different modules in the ERP and present this as live information to the user.

Cycle Counting

Functionality of ERP software that allows for singling specific inventory items or categories for frequent stock take counting. This functionality eliminates the need for full warehouse stock take processes and provide more accurate real-time inventory valuations.

MRP

Material Requirements Planning software is designed to provide a systemized approach to turning raw materials into finished goods. MRP will also look after how a work order that is in progress is routed throughout the production floor to ensure optimal use of labour, equipment and storage.

Mobile Data Collection

The ability to collect data on a mobile device through a mobile optimised, usually simplified interface.

Backflush

Backflushing delays the GL impacts of costing work order production until the work order is complete. Once complete, the ERP automatically ‘flushes’ back to assign individual costs to the finished goods. The opposite of this would be “WIP” or Work In Progress costing, where inventory and overhead costs are attributed to a WIP account in real or close to real time as work is in the process of completion on the work order.

RAS. Resource Allocation Scheduling

Functionality that automates resource and materials capacity planning as well as providing suggestions for optimum scheduling and resource allocation, usually in the context of projects.

UX

The User Experience. Elements in a system such as utility, ease of use and efficiency that add value to the customer’s journey and experience of a software.

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Get your copy of the ERP TERMINOLOGY DEMYSTIFIED. A list with more than 40 English terms commonly used in the ERP Industry.

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